Bandwidth caps coming to AT&T wireline services

It seems that the era of unlimited data consumption isn't just ending for wireless Internet services anymore.

FRAMINGHAM, 14 MARCH 2011 - It seems that the era of unlimited data consumption isn't just ending for wireless Internet services.

That's because, as Broadband Reports first reported, AT&T plans on implementing a new 150GB cap on its DSL customers and a 250GB cap on its U-verse customers starting in May. According to Broadband Reports, AT&T will charge users an extra $10 for every 50GB of data they consume over the cap limit. However, these overage charges will only kick in once users have exceeded the caps three times or more -- in other words, users can go over the cap twice over the lifetime of their account and not face any overage charges.

AT&T told Broadband Reports that potential overage charges would only affect around 2% of its DSL customers, since the average DSL customer consumes 18GB of data per month. The carrier also says that it will notify customers when they exceed 65%, 90% and 100% of their monthly data allowance, similar to the way that AT&T notifies its wireless subscribers when they're about to exceed monthly limits.

AT&T and rival carrier Verizon (VZ) have both moved away from all-you-can-eat data plans and toward tiered service plans for their wireless services, such as the recently-released iPad 2 data plans that feature caps that range from 250MB per month to 10GB per month. AT&T got the ball rolling on wireless data caps last year when it announced it was dropping unlimited data plans for the iPhone in favor of plans that offered between 200MB and 2GB of data consumption per month. Verizon shortly followed suit by saying it would implement a similar pricing scheme for its 4G LTE services that are due to launch later this year. Verizon COO Lowell McAdam hinted earlier this year that LTE plans would give users a certain amount of data they could consume every month before they would have to pay overage fees.

But implementing data caps on wireline services has never worked out particularly well for ISPs. In 2009, for instance, Time-Warner Cable decided to shut down a trial program that put bandwidth caps on its cable Internet services due to customer complaints about the potential for paying overage charges. ISPs have been experimenting with implementing bandwidth caps since 2008, when Comcast (CMCSA), Time Warner (TWX) Cable (TWC) and AT&T, all announced they were trialing new capped services. All the caps had always proven controversial, however, as one woman has even sued AT&T for being billed $5,000 in Internet overage charges.